Many visitors to this website also frequent Reflections of a Newsosaur, a blog written by Alan Mutter, who is “perhaps the only CEO in Silicon Valley who knows how to set type one letter at a time.”

Mutter was a reporter and editor at major metro dailies for 20 years before transitioning to a successful career as a technology CEO in Silicon Valley. His blog combines an executive’s financial acumen with a journalist’s inquisitiveness. Newsosaur offers insight on the media industry’s financial condition that you just can’t get anywhere else. Not surprisingly, it is one of the top 10,000 blogs worldwide, according to Technorati.

Mutter particularly enjoys challenging conventional wisdom with mathematical fact. Early this week he poked holes in the recent excitement over micropayments by creating a likely revenue scenario. Using The New York Times as a subject, he concluded that micropayments would bring in less than $4 million a year, or enough to pay about 2% of its staff. For small papers, they would amount to beer money. Pundits have come to rely on Mutter for reality checks like that.

Knack for Numbers

His financial analyses are his signature item. Mutter sounded the alarm about the newspaper industry’s growing debt load more than four years ago, and he has methodically documented the damaging role that debt has played in limiting the industry’s options. His Default-O-Matic documents the financial viability of major players, giving early warning of who’s likely to be next off the cliff.

A complete financial restructuring of the industry is likely, Mutter says. Debt has painted publishers into a corner and many will have no choice but to walk away from their obligations and let the banks and investors sort it out. It’s not that the core business model is so bad, he says. It’s that their financials stink.

Having reader Newsosaur for a couple of years, we thought it would be interesting to find out more about the person behind it. So we called up Alan Mutter and spent an hour on the phone with him. Our complete, lightly edited interview is below for you to stream or download.

Show Notes

:40

His day job; how Newsosaur got started

2:45

His background in newspapers and transition to high-tech executive

9:40

The same problems he was writing about in 2004 are still apparent today. “It’s been the same story for the four years. The difference is that publishers are running out of options.”

12:30

How the industry has responded to his warnings: “A lot of denial.”

15:00

How this mess could have been avoided: “Giving away all this content for free was the original sin.”

How newspapers failed to adapt their products to the unique environment of the Web.

22:00

The Coca-Cola analogy: A company adapts to continually changing market conditions

25:00

Newspaper companies have enjoyed “a phenomenal number of unfair advantages” that could have been exploited but executives failed to innovate. How rampant layoffs are destroying newspapers’ core strength.

28:00

Most broadcast outlets have almost no reporting staff; what happens when the local newspaper disappears?

30:30

“What will American democracy be in like in the absence of a vigorous press? We’ve never seen that. Ever.”

33:30

The dubious possibility that citizen journalists and bloggers will fill the vacuum.

37:40

The outlook for 2009: “It’s not that the underlying business is so bad but that these companies are heavily laden with debt.” Large-scale revaluations will be needed.

43:00

Threat to the core business: “When we come out of this, people will still buy cars but I’m not sure they’ll buy newspapers.”

45:00

Why micropayments and endowment solutions won’t work.

48:00

Who’s doing it right: innovation at the local level.

51:00

The Chicago Tribune‘s play for young readers.

53:15

How the Newsosaur blog has changed his world; the industry’s reaction.

56:00

Even at this late date, there are things that could be done. Have media companies called him for advice? “A few, but there’s room for more.”

Mutter is in favor of paid premium content but I don’t think he’s ever advocated for micropayments. Very lively debate here. He suggested the only way micropayments can work is if publishers form a cartel, and that’s not going to happen.

He suggested the only way micropayments can work is if publishers form a cartel, and that’s not going to happen.

last time i checked, there were papers all over the country combining and starting to ‘share work’ in all sorts of cartels. right now, to stay alive and keep representing the rich appropriately, they’re daring the Justice Department to file antitrust charges.

Posted by Peter

April 13, 2009 @ 8:39 pm

[…] probably go the way of Times Select before too long. The problem is, as Alan Mutter phrased it in our recent interview, “Giving away all this content for free was the original sin.” Boston.com is the sixth […]